Debt ceiling debate is simply a question of clauses

WASHINGTON — As Congress lurches toward the next cliff, a repeat of whether to raise the nation's debt ceiling, it comes down to a question of clauses. Much is once again being made of Section 4 of the Constitution's 14th Amendment: "The validity of the public debt of the United States, authorized by law, including debt...

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By Douglas Cohn and Eleanor Clift

poconorecord.com

By Douglas Cohn and Eleanor Clift

Posted Jan. 11, 2013 at 12:01 AM

By Douglas Cohn and Eleanor Clift
Posted Jan. 11, 2013 at 12:01 AM

» Social News

WASHINGTON — As Congress lurches toward the next cliff, a repeat of whether to raise the nation's debt ceiling, it comes down to a question of clauses. Much is once again being made of Section 4 of the Constitution's 14th Amendment: "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."

But the Obama administration has decided it will not threaten its use if Congress refuses to raise the debt ceiling because most legal experts agree that the clause only refers to debt already authorized.

However, another constitutional path is more inviting, and it revolves around three other constitutional clauses:

Article I, Section 9, Clause 7: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law ..."

If under Clause 7 Congress has appropriated money and the president has signed the appropriations bill into law, thereby authorizing the various federal departments such as Defense to draw specific sums from the Treasury, the Treasury must comply. But what happens if the Treasury is empty, having spent everything it received from revenues, sales, and borrowings? Congress cannot say to the secretary of the Treasury, "We may have ordered you to fund the nation's departments and agencies, but you cannot do so until we authorize the Treasury to borrow money under Clause 2 or print money under Clause 5."

Not all constitutional clauses are equal. In this instance, Clauses 2 and 5 are pointless without Clause 7 because there is no reason to borrow or print money other than to spend it. That is where Clause 7 comes in, and when employed alone, it clearly incorporates the obviously subordinate Clauses 2 and 5.

If an appropriations bill is subject to further borrowing or printing authorization, it must include such language in the bill. In the absence of such language, the Treasury has no choice but to comply with the law. It must fund as directed. As a result, an appropriations bill includes the tacit authorization for the Treasury to borrow and/or print money because it would have no other means of complying with the law if the Treasury is empty.

If, on the other hand, Congress passed a bill under Clauses 2 and 5 forbidding the Treasury from borrowing and printing additional money at the same time it approved an appropriations bill that could not be funded any other way, a true constitutional crisis would ensue. In reality, of course, this is impossible because no president would sign such conflicting bills into law.

Returning to the appropriations scenario alone, how would the Supreme Court likely rule if a case were brought against the secretary of the Treasury for borrowing and printing money without congressional authorization if done to fulfill its legal obligation to disburse funds as directed by Congress in its appropriations bill?

Surely the justices would side with the secretary of the Treasury who would have had no choice but to comply with the intent and letter of the law. And absent any language or law to the contrary, the intent of Congress would be clear: If the Treasury is ordered to spend money it does not have, the congressional order includes the tacit authorization to borrow or print the necessary money.

This is all the more true if at the time Congress passed the appropriations bill it knew that the Treasury could only comply with it by borrowing or printing money. The intent is clear.